The index remained unchanged from August. However, it indicated a modest improvement in manufacturing sector business conditions in September.

An index reading of above 50 indicates an overall increase in economic activity and below 50 an overall decrease.

"September data painted an encouraging picture as the sector continued to recover from the disruptions caused by the introduction of the GST in July," said Aashna Dodhia, Economist at IHS Markit and author of the report.

"This sustained amelioration reflected expansions in new work and output, supported by stronger domestic demand conditions. Subsequently, business confidence strengthened among manufacturers as they reportedly anticipate long-term benefits from recent government policies."